The state of Texas nominated downtown Round Rock for a federal program that allows individuals and businesses to reinvest capital gains into the area.
At a glance
The Round Rock Chamber announced the downtown district's selection as a potential Opportunity Zone in a Sept. 21 news release.
The Opportunity Zone 2.0 program, made permanent by the 2025 federal funding bill, allows individuals or entities that sell assets at a profit to reinvest the capital gains into a fund. Those entities can defer and potentially avoid federal capital gains taxes depending on how long the fund holds the investment, the chamber's release states.
Any entity that has realized capital gains can invest into the fund created by this program. It does not require that investors live or do business within the downtown district.
How it works
Homes, stocks and other valuable property are generally known as capital assets for tax purposes. Per the Internal Revenue Service, the federal government assesses capital gains taxes when this type of property sale turns a profit.
Under the Opportunity Zone program, individuals and businesses would invest profits made from such sales into a Qualified Opportunity Fund. These funds are specialized investment vehicles set up to channel private capital into eligible local properties and businesses.
Using the fund, private entities can pay for local projects, such as adaptive reuse of historic buildings and business expansions, per the release.
What's next?
Once the U.S. Department of the Treasury certifies Texas' Opportunity Zone map in November, the designations will go into effect Jan. 1, per the chamber.
